How I Used Strategic Planning To Benefit My Business

Not having a strategic plan is analogous to not having an itinerary when you get to the airport. Will you make your flights? Will you have time to eat lunch? Will there be someone waiting to pick you up when you arrive? Having an itinerary gives you a better chance at having all these questions answered in a satisfactory way. Can they still all be answered in a way that will allow you to reach your destination and survive even if you don’t have an itinerary? Yes, they can, but when you are running a business, a strategic plan can help to take the guesswork out of the equation to the highest degree possible.

The Long and Short of it

In my experience as a minority partner, Director, and Vice President of a new corporation that still exists today, a strategic planning discipline will vary as your company matures. My former company was a start-up.  How we strategized in the first five years was different than how we did it after 10 years. The key components to successful strategic planning include long-term and short-term plans.

Long-term planning includes a high-level vision of what your company will look like in three to five years. Three years may be too long for a new company; for a mature company, a five-year strategy may look much the same as it did for the previous five years. The goal of long-term planning is to create agreement among your board, or senior management, about the direction the company wants to go.

Short-term plans usually encompass a year, but in some cases it’s a year with an agreement to revisit in six months. For short-term planning, the company’s management team needs to share in the long-term vision and set the goals and benchmarks that will allow the company to achieve the longer term vision.

Set it and Stick With it

My former company started with two employees and a long-term strategic plan to:

  1. Serve many clients, i.e. we wanted to be big.
  2. Be profitable by year five.
  3. Be virtual, which meant that we didn’t want to own all the resources we needed; we would keep overhead costs down by outsourcing and contracting for specific services.

For the first few years as we “grew the company,” our short-term plan shifted with every new prospect, new product, and new customer. We met frequently to ask ourselves if we were on track and made decisions that supported our long-term goals.

After five or six years, we became more disciplined about having a budget and an operational plan and using it to monitor and manage expenses. Our budget setting process became the main driver of our strategic planning process each year. From the budget came a marketing plan and sales goals.

The marketing plan was our best effort, based on past practices. This required us to track our sales results by forecasting how many proposals and for which product we would need to deliver, in order to achieve our sales goals and what the cost of sales would be. Our sales forecast included discussion about new sales and repeat business. The sales forecast drove our revenue forecast, which was a big component of our annual budget, and our budget drove our operational planning, including how many new employees would we need, by position, and when?

For the first few years of our company’s existence, the budget was fluid, meaning that while we hoped we would follow it, our finances were subject to rapid change when we made a new hire, made a new sale, or lost an existing client. But after those early years, as we tracked more and more actual vs. projected revenue and expenses, we were able to make decisions based on our original long-term plan and our more recent short-term plan. 

A Constant Vision

Over the 25 years, we modified our long-term plan only once, although we revisited it numerous times. It continued to be a vision we all shared and wanted to pursue. The company I helped start and run 25 years ago continues to exist today. A strong discipline of strategic planning was an important part of the foundation that allowed it to be successful.

Could your organization benefit from a strategic long or short-term plan?

Pat Gagne

Pat Gagne, FLMI, Manager of Benefits Plans and Compliance for Aureon HR, brings more than 35 years of experience in the field of employer group insurance benefits to Aureon HR's team. Having owned and run a small Iowa-based employer for 25 years prior to joining Aureon HR, Pat brings a small employer's perspective on benefit plans, compliance issues and customer service.


January 25, 2017

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Pat Gagne